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Metals May Continue Fluctuating on Lower-than-Expected China GDP Growth
Apr 13,2012 11:21CST
smm insight
Source:SMM
Metal prices will likely continue to fluctuate widely in the near future in the absence of additional economic news, and investors should continue to control the proportion of positions.

SHANGHAI, Apr. 13 (SMM) -- According to the National Bureau of Statistics (NBS), China’s GDP reached RMB 10.7995 trillion during the first quarter of 2012, up 8.1% YoY and up 1.8% on a quarterly basis. Meanwhile, other domestic economic data also show slower investment, weaker demand and stronger inflationary pressures. SMM predicts industrial production and markets will be pessimistic for the foreseeable future, which will exert negative impact on metal markets.

The signal of China’s economic slowdown will weigh down equity and commodity markets, combined with weak US nonfarm payrolls released last Friday, concerns over the global economic outlook may resurface, and the upward room for equities and metals prices may be restricted.

The General Administration of Customs (GAC) said April 10 that China's imports and exports expanded 7.3% from a year ago to reach USD 859.37 billion for the first quarter of 2012. Imports reached USD 160.31 billion in March, up 5.3% YoY, with a trade surplus of USD 5.35 billion. After seasonal adjustment, China’s foreign trade, exports and imports were up by 7.2%, 9.8% and 4.6% YoY, respectively. China’s foreign trade in March posted a slower growth amid ongoing European debt crisis and waning domestic demand. In addition, China’s PPI for March hit a 28-month low, and the CPI growth in March rebounded. These figures show the growth of investment, consumption and foreign trade slowed.

Cash liquidity showed signs of easing. The People's Bank of China said April 12 that China’s new yuan loans were RMB 1.01 trillion in March, bringing total new yuan loans in the first quarter to RMB 2.46 trillion. The demand for loans from the real economy improved slightly following better operations at enterprises, and banks absorbed more deposits through issuing wealth investment products at the end of quarter in order to achieve operating objectives, strengthening their lending ability, both resulting in the higher-than-expected new loans in March and in turn helping ease cash liquidity.

There is high likelihood metal prices will continue to fluctuate widely in the near future in the absence of additional economic news, and investors should continue to control the proportion of positions.

 

base metals
GDP
NBS
GAC

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